This paper compares six different approaches to calculate Z-score using a final dataset of 183 insurers (1,382 observations) operating in the Spanish insurance sector during the period 2010-2017. This measure of risk has widely been used in the banking literature, and it has recently been...

Over the last decade, stress testing has become a central aspect of the Fund's bilateral and multilateral surveillance work. Recently, more emphasis has also been placed on the role of insurance for financial stability analysis. This paper reviews the current state of system-wide solvency stress...

We test the hypothesis that practicing Enterprise Risk Management (ERM) reduces firms' cost of reducing risk. Adoption of ERM represents a radical paradigm shift from the traditional method of managing risks individually to managing risks collectively allowing ERM-adopting firms to better...

This study examines the relation between incentives and risk taking for 466 insurer-year observations over 2006-2010. Our results show that independent director compensation is positively related to risk taking as is CEO compensation and institutional ownership. Besides dollar value and...

Does a catastrophe bond issue increase the insurance firm value to shareholders? By issuing such bonds, insurance companies that are exposed to weather claims, can share their risk with investors, managing the corporate risk. The academic literature argues that hedging activities can increase a...

We investigate the effects of adopting enterprise risk management (ERM) on the performance and risks of European publicly listed insurance firms. Using a dataset for 24 years, we report new results which show that ERM adopters realize significant ERM premiums after controlling for other...

This paper aims at providing a conceptual distinction between banking and insurance with regard to systemic regulation. It discusses key differences and similarities as to how both sectors interact with the financial system. Insurers interact as financial intermediaries and through financial...

This paper analyzes the factors that determine the solvency of the insurance companies operating in Spain. The selected time span, from 2008 to 2015, encompasses a period of economic instability characterized by record low interest rates and low or even negative economic growth. Using a dynamic...

We develop a theoretical framework to analyze the relationship between jump risk management and firm value. By focusing on loss risk and insurance, we derive that insurance (or jump risk management) can significantly increase firm value. In addition, our work indicates that a firm would choose...

Inflation risk is of high relevance in non-life insurers' long-tail business and can have a major impact on claims reserving. In this paper, we empirically study claims inflation with focus on automobile liability insurance based on a data set provided by a large German non-life insurance...